Trump Can Withhold Billions in Foreign Aid & Trial Lawyers' Warning

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2:00This is Bloomberg Law with June Grosso from Bloomberg Radio. The Trump administration has made deep reductions in foreign aid one of its hallmark policies. In fact, early in his second administration, Trump announced a hold on tens of billions of dollars in foreign aid. And a few months later, administration officials dismantled the U.S. Agency for International Development, which administered the funds. Nonprofits and international aid groups sued in February over an estimated$30 billion that Congress had approved for programs spanning several years, arguing that the executive branch can't unilaterally refuse to spend money appropriated by Congress and that the cuts could have devastating effects in certain areas of the world.

2:54Secretary of State Marco Rubio disputed the effects last week. We shut down AID because it was a dysfunctional organization. We moved it under the State Department. Number two, we are going to do more foreign aid than any country in the world, than any country in the world. And on Friday, the Supreme Court's conservatives, in an unsigned order, ruled that the Trump administration could withhold$4 billion in congressionally approved foreign assistance funding poised to expire at the end of the month. It lifted a lower court order that would have required the administration to commit to spending the money.

3:30My guest is constitutional law expert Suzanne Goldberg, a professor at Columbia Law School. Russell Vaught, the White House budget director, said this decision was a major victory. How important do you think this decision is? I agree that the decision is significant and important, but would completely disagree that this is a victory for the American people. This decision puts even more at risk the separation of powers by allowing the executive branch and the president to refuse to spend money that Congress has authorized. Congress has legislated against these kinds of efforts, and the court has simply allowed the executive branch to override the will of Congress here.

4:19Temporarily, it's a provisional ruling, but it's still a serious incursion on the separation of powers. This was on the emergency docket, an unsigned order. The court's conservatives in the majority, so it was a six to three decision. There was very little explanation from the majority, but explain what they did say. The majority was faced with the question whether the Impoundment Control Act by Congress would prohibit organizations from suing the government when the government executive branch, the Trump administration, refused to provide foreign aid funding that Congress had authorized to be provided.

5:01And this is a new issue. No lower court has rolled down the question. And the majority in barely a sentence said the administration had made a sufficient showing that this impoundment act barred the private organization's lawsuit. As Justice Kagan points out in her dissent, that isn't what the act appears to say. It is not what the act's history would suggest. And everything is really to the contrary. So the one sentence sort of shrug off of the plaintiff's argument here is perplexing and really troubling. Chief Justice Roberts emphasizes that this is a provisional ruling, meaning it's not the final word on whether the executive branch can refuse to spend money authorized by Congress.

5:50But for the purpose of this$4 billion in funds, it is the final ruling because the funds will expire at the end of the federal budgetary cycle. The court, in its handful of sentences, did not take on any of the very serious issues that the case presents. The administration argued that being forced to spend the money now would hurt its ability to carry out foreign affairs. And in a lot of these cases where there is a challenge to Trump administration actions, they seem to be raising either foreign affairs or national security. Does the Supreme Court just simply bow whenever the administration says national security or foreign affairs?

6:32No, the Supreme Court up until recently does not simply bow when the administration refers to national security or its authority in foreign affairs. Of course, the executive branch has significant discretion in both areas in how it spends foreign assistance in determining national security priorities. But we still have a constitution, and the constitution requires the court, when it receives a challenge to administration actions, to review what the executive branch is doing. In this case, which had to do with a longstanding, really foundational practice of the way U.S. government functions, which is that Congress authorizes funds, the administration actions in saying we're not going to spend your funds are startling.

7:25We haven't seen anything at this level since Richard Nixon was the president. And Richard Nixon, though he tried not to spend many funds that Congress had authorized, ultimately pulled back and recognized that he was standing in the way or really tried to disrupt the balance of powers that's between Congress and the executive branch. But Congress, after Nixon tried to refuse to spend authorized funds, passed a law specifically to say the president can't do that. And if the president objects to how Congress has authorized funds, the president can voice those objections directly to Congress and Congress will consider those objections.

8:07There's not a special national security or foreign affairs rule that gets the executive branch out of having the legality of its actions reviewed. Trump used what's called a pocket rescission here. Can you tell us about that? Yeah, so the president has, you know, at the outset of his administration, President Trump issued an order saying all foreign assistance would be paused while his administration reviewed whether the spending was consistent with his priorities. Ultimately, after a long pause, the administration did spend some of the money, but it withheld this$4 billion in funding authorized by Congress and said, essentially, we're not spending that.

8:58And that is the nature of the so-called pocket rescission. But the Impoundment Act actually requires the president to submit his position to Congress, which can review and make adjustments if it so chooses. And that's not what happened here. I mean, would anyone expect that this particular Congress would go against what the president wants? You know, in ordinary times, Congress zealously safeguards its authority. And when it believes the president is encroaching on that authority, contravening the separation of powers that our Constitution sets out, Congress acts. Indeed, that kind of action is what led to the Impoundment Act passed by Congress many years ago to say, President, you cannot simply decide not to spend money that we, the representatives of the people, have authorized for you to spend.

10:00Congress, since President Trump has taken office, has not protected its authority and instead has ceded its authority, leaving the Supreme Court to be the safeguard of this separation of powers under which Congress authorizes spending of the American people's funds, of course, consistent with the president's priorities, but also consistent with the views of Congress. President Trump has advanced a view that his branch, the executive branch, should be able to override both the Congress and the wishes of Congress and the Supreme Court. And in some sense, make the president more powerful than any other branch of government.

10:44And unfortunately, Congress seems to be agreeing to that. the court in this provisional ruling has let him pursue that path as well, which is why the ruling is so troubling. There was this very, very short majority explanation, we'll call it, and then a longer dissent. Explain what Justice Kagan said in dissent. Justice Kagan makes several points in her dissent. First, she says this case was not appropriate for an emergency ruling. We have a high standard. She says the court has a high standard for deciding to grant emergency relief, and this case doesn't meet that standard. And then moving on, she says the court's one-sentence notation, really, that the government is likely to win its argument on the marriage, says there's no basis for that.

11:45The law makes clear that that's not correct. The history of the law makes clear that that's not correct. And, you know, to sort of boil it down, her opinion says to the majority, what are you doing? This isn't appropriate. This is not an emergency. If you give the president the authority to withhold this money that Congress has authorized, it's the end of the case. The effect is to prevent the funds from ever reaching their intended recipients, not just now, but for all time, because the funds will expire. And she says the government is completely, utterly incorrect in its argument that the president should be able to withhold these funds.

12:26The law passed by Congress that says the president cannot impound, meaning hold back, funds authorized by Congress doesn't have anything to say about whether these organizations can file a lawsuit challenging the government's withholding of those funds. Of course they can. And the law, even when we look at its history, was passed at a time that makes clear that organizations that are anticipating these funds can file a lawsuit against the government seeking the distribution of those funds. So she expresses quite a lot of concern about the destabilizing effect that the majority's ruling even provisionally will have.

13:07Coming up next, I'll continue this conversation with Professor Suzanne Goldberg. We'll take a look at the emergency docket and where the Supreme Court has come down on most Trump administration requests. You're listening to Bloomberg. Support for the show comes from Public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions. Buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English. Like, if the VIX hits 25, buy a put option on the S &P 500.

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15:28Don't miss Guns N' Roses. The Supreme Court is allowing the Trump administration to withhold$4 billion in congressionally approved foreign assistance that's poised to expire at the end of the month. The conservative justices lifted a lower court order that would have required the administration to commit to spending the money that was over the dissents from the court's three liberals. The unsigned order on Friday bolsters President Trump's effort to claw back funds that Congress approved. The money is set to expire after the fiscal year ends on September 30th if the State Department and what's left of the U.S.

16:13Agency for International Development don't commit to spending it. I've been talking to Columbia Law School professor Suzanne Goldberg. This latest ruling by the Supreme Court follows a pattern of lower courts holding back the Trump administration's actions, appellate courts affirming that, and then the Supreme Court on the emergency docket coming in and reversing and allowing the administration to go forward with its actions. We saw this with allowing Trump to cancel nearly$800 million in National Institute of Health grants and up to$65 million in teacher training grants, allowing Trump to ban transgender soldiers from the military, to carry out mass layoffs of federal employees, to remove the heads of independent agencies, and on and on.

17:10Why are the conservative justices giving this stamp of temporary approval, but still approval, to Trump's actions on the emergency docket where there isn't full briefing and we don't know what the explanation is most of the time for their decisions? This is utterly unprecedented to have the Supreme Court clear a path for a presidential administration to, in essence, do whatever it would like, whether it's refuse to spend money authorized by Congress or to pull a set of accomplished service members out of military service or to pull grant funding from a range of institutions. without going through well-established longstanding procedures.

18:01And not only to allow the executive branch to pursue all of these aims, often riding roughshod on well-established law, but to do that on the so-called emergency docket, which means that the court has not had a full hearing of the case and is not issuing a full opinion after the benefit of argument. Indeed, this case is a good example where in a handful of sentences, the court allows the president to say, I'm not spending money that's been authorized by Congress, even though there is a law that says I have to spend this money. And even though there is another set of laws that says, if I'm not going to spend this money, I have to go through a certain procedure, which has not been followed.

18:48So it's quite startling and should be deeply disturbing to anyone, whatever one's views, who holds value in the rule of law and in the Supreme Court serving as a protector of the Constitution, and doing that not only by responding appropriately and promptly to serious national issues, but also by explaining its reasoning. We just don't see that here, And that is very, very concerning. In fact, Justice Kagan makes this point clear, right, saying that this case, this application for a stay was heard on a short fuse, less than three weeks, scant briefing, no oral argument, no opportunity to deliberate in conference.

19:36And she points out that on the regular docket of the Supreme Court, the court will decide cases of far less import with far more process and reflection. So there are real reasons to be concerned about the use of the emergency docket to allow this administration or really any administration to step away from, to ride roughshod over longstanding laws that restrict the administration's authority. And that should be deeply troubling to all of us. This is a test of presidential power. Why does the Supreme Court want to give another branch of government so much power? You would think that they would, you know, at least guard their own power.

20:24Why give it to another branch of government? It sort of seems counterintuitive to me. I think it's the right question. I think it is appropriate to ask why Congress and the court seem to be ceding power or authority to the executive branch. the American system is designed, the premise or the foundational premise is that each branch checks the other. They're mutually checking. We talk about separation of powers, but part of what we mean by that is that each serves as a check on the other. And when that mutual checking stops, Perhaps the foundation that holds up our system is at risk of collapse.

21:15Why is the Supreme Court ceding so much authority and also giving what seems in many cases to be unfettered discretion to the executive branch? You know, there are many theories out there. There are political theories. There are sort of jurisprudential theories. But one true line I think we can see is that at least some of the justices in the majority of these opinions believe the executive branch does have more authority, right? That there's this idea of the unitary executive that really should drive the country and its works, that the president has a unique level of authority and basically shouldn't be impeded in exercising that authority.

22:01The concern is, of course, that was a monarchy, right? And that's what the American system moved away from, where there was one figure who had essentially unfettered authority. To the extent the other branches are ceding authority to the one figure in the name of the unitary executive theory, the risk is that we get closer and closer to a return to a kind of monarchy that, at least at the time of the revolution, Americans had rejected. And most of these Supreme Court decisions are being carried out by the six conservative Republican appointed justices. I think when we have judges who, you know, district court and appellate judges who have been appointed by all sorts of presidents, you know, generally in many cases coming to the same position that the administration's actions are unlawful.

23:06One has to wonder at the five or more often six members of the court who disagree repeatedly in every case. You know, we would be blinking reality if we were to say something is wrong with all of the district courts and all of the circuit courts that are saying no to certain presidential actions. And yet five or six justice majority on the Supreme Court continues to say yes to the president. Go ahead and disregard the law. I think that that is another that is something that should give all of us pause. Well, the regular term starts next Monday. We will see if there is any difference in the way the Supreme Court handles the Trump cases on the regular docket as opposed to the emergency docket.

23:57Thanks so much for joining me today, Suzanne. That's Professor Suzanne Goldberg of Columbia Law School. With the indictment of former FBI Director James Comey, President Donald Trump advanced his push for legal action against his perceived political enemies. The indictment appeared to be a break from legal norms at the Justice Department, secured by a new acting U.S. attorney, an insurance lawyer with no previous experience as a prosecutor, replacing the career prosecutor who didn't think there was enough evidence to take the case to a grand jury. It's heightening concerns about the Justice Department's independence.

24:39But on Friday, Attorney General Pam Bondi doubled down on the threats of prosecutions of Trump's enemies on Fox News. Whether you're a former FBI director, whether you're a former head of an intel community, whether you are a current state or local elected official, whether you're a billionaire funding organizations to try to keep Donald Trump out of office, everything is on the table. We will investigate you and we will end the weaponization. The American College of Trial Lawyers is warning that Trump's demands to prosecute his political opponents are a blatant attack on the rule of law and erode due process.

25:20Joining me is the ACTL's president, Richard Dean Jr. He's a former U.S. attorney who served under both presidents Bill Clinton and George W. Bush. Were you surprised that the Justice Department brought charges against James Comey after being urged by the president? It's difficult to say because once I'd seen the announcement from the president, like most other citizens, I suppose, I just paid attention to see what came next. To say that I was surprised, I can't say. What I can say is it was a very unusual process because the news media was reporting that it appeared that the career prosecutors in the office were of the view that the case was not sufficient to be prosecuted.

26:11So when the president's announcement was made, it really caught the attention of many lawyers, especially because it seems so out of the ordinary. Prosecutors are supposed to make decisions based on the evidence and present cases to the grand jury only when they believe they can prove the case at trial. If prosecutors don't follow that, are they risking their bar licenses? Well, I guess they could. But if there were to be complaints raised or if the bar itself were to initiate an inquiry, that would be a legitimate concern. Because you are ethically, as a prosecutor, required to believe that you have a credible factual basis to go forward with a case.

26:58And as a matter of ethics, no lawyer should file a pleading in court that they don't believe has a factual basis and has factual support. Is it rare for prosecutors, though, to face charges in that circumstance? I think it's somewhat rare that charges like that get or allegations like that get filed because the Justice Department has had historically a very strong reputation for ethical conduct. and I think as a result of that they have what's known in the law as a presumption of regularity that when the courts look at the Justice Department's operations they based on their history the courts presume that they've conducted themselves ethically and appropriately according to their history.

27:48That's why there have been probably so very few of those kinds of allegations or charges raised against the department. Rick, tell us about the concerns of your members. What has concerned us, that whenever you're focusing prosecutorial attention and prosecutorial authority on individuals, rather than on conduct and the possibility that persons have committed whatever the conduct might be, that's problematic because prosecutors have such wide-ranging authority and wide-ranging power, frankly, to investigate cases, the history has always been that prosecutorial authority should be focused on cases that should be brought and not focused on people who should be prosecuted.